Bank stocks took a dive on Tuesday, as the United States and European allies considered action over Syria's alleged use of chemical weapons.

NEW YORK ( TheStreet) -- Large banks saw their stocks hammered Tuesday as investors grew jittery over the possible use of force by the U.S. and European allies against the government of Syria.

The Dow Jones Industrial Average was down nearly over 1% to close at 14,776.13, while the S&P 500 ( SPX.X) declined 1.6% to close at 1,630.48 and the Nasdaq Composite sank over 2% to close at 3,578.52, following U.S. Secretary of State John Kerry's strong language late Monday condemning "the indiscriminate slaughter of civilians, the killing of women and children and innocent bystanders by chemical weapons," by the government of Syria last week.

The KBW Bank Index ( I:BKX) saw its worst performance in over two years, down 3%to close at 63.27, with all 24 index components showing declines.